Trade Liberalization Essay

3012 Words Mar 29th, 2011 13 Pages
MBA program
Business Economics
Assignment 1
Trade Liberalization
Prepared by : Rawda Sayed Mohamed Hassan
Supervised by: Dr/ Khaled Hanafy

Table of Contents

Definition of trade liberalization3
Liberalization VS Protectionism3-4
When & How started5-7 WTO5
Main functions of WTO 6
Principles of trade6-7
Gains from trade liberalization8-9
Effect of trade liberalization on developing countries10
Effect of trade liberalization on Egypt10-11

1) Definition of Trade Liberalization: It refers to the removal or reduction of trade practices that prevent free flow of goods & services between one nation & another. This includes tariff & non tariff barriers such as (duties, export
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7. Exchange Rate manipulation: A government may intervene in the foreign exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, leading to an improvement in its trade balance. However, such a policy is only effective in the short run, as it will most likely lead to inflation in the country, which will in turn raise the cost of exports, and reduce the relative price of imports. 8. In the modern trade many other initiatives besides tariffs have been called protectionist. For example, efforts in imposing labor or environmental standards as protectionism. Also, the imposition of restrictive certification procedures on imports is seen in this light. 9. Further, others point out that free trade agreements often have protectionist provisions such as intellectual property, copyright, and patent restrictions that benefit large corporations. These provisions restrict trade in music, movies, drugs, software, and other manufactured items to high cost producers with quotas from low cost producers set to zero

3) When & How started:
Trade Liberalization is one of the signs of Globalization. It occured when governments decided to move toward free trade. Extensive trade

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